Bankoh earnings flat in first quarter

The bank's profits match estimates from analysts

Bank of Hawaii Corp. posted flat earnings in the first quarter, matching analysts' estimates, helped by strength in loan-origination volume and deposits.

The state's second-largest bank in assets saw its net income slip 0.4 percent to $45.4 million, or 87 cents a share, from $45.5 million, or 83 cents a share, a year earlier. The increase in earnings per share was attributable to the bank's stock repurchase program, which included the buyback of 700,000 shares last quarter at a cost of $34.7 million.

Bankoh's $172,000 decline in net income in the first quarter included a provision for credit losses of $2.8 million. There was no provision for credit losses in the first quarter of 2005.

"We always like to see earnings grow, but when the bank is performing this well, we were pleased with the overall results of the quarter," said Allan Landon, Bankoh's chairman and chief executive. "Including the provision, net income was essentially unchanged and our performance ratios were very good."

A survey of eight analysts by Thomson Financial had forecast earnings per share of 87 cents with a range of 85 to 88 cents. The bank also kept its full-year earnings estimate at approximately $187 million, including a $17 million provision for credit losses.

In addition, the bank said yesterday that it will maintain its stock dividend at 37 cents a share. The dividend will be payable June 14 to shareholders as of May 31.

Bankoh's total assets increased 6.3 percent last quarter to $10.5 billion from $9.9 billion a year earlier and deposits were $8.1 billion, up 5 percent from $7.8 billion.

Total loans and leases were $6.3 billion, up 3.8 percent from $6 billion a year earlier.

"We've had good loan-origination volume for a number of quarters and some of the prior quarters have had some prepayments," Landon said. "This quarter that payment of loans slowed down so our balance sheet grew."

Net interest income, which reflects the difference between what the bank pays depositors and what it brings in from loans, grew 1.5 percent to $102.2 million from $100.7 million a year earlier. The net interest margin was virtually unchanged at 4.41 percent compared with 4.42 percent a year ago.

"The last several years we've been working on getting better," Landon said. "We've gotten to the point where our financial performance is very solid now. For us, consistency is a real attribute. That's probably pretty boring, but we like to be boring and good."

Noninterest income, which includes revenue from service charges and fees, rose 0.5 percent to $52.6 million from $52.3 million.

Nonperforming assets decreased 28.4 percent to $5.9 million from $8.3 million. The ratio of nonperforming assets to total loans and leases, foreclosed real estate and other investments fell to 0.09 percent from 0.13 percent.

Bankoh's return-on-assets ratio, which indicates how many dollars of profit it achieves for each dollar of assets it controls, declined to 1.82 percent from 1.88 percent.

Its return-on-equity ratio rose last quarter to 26.13 percent from 23.66 percent.